Politics · India Bureau
Sebi fines CDSL ₹1 crore over compliance lapses in depository operations
India's markets regulator has penalised Central Depository Services (India) Ltd for multiple regulatory violations uncovered during an inspection of its fiscal year 2023-24 operations. The penalty includes failures in communication protocols and inadequate disaster recovery measures.
LSN India ·
The Securities and Exchange Board of India (Sebi) has imposed a ₹1 crore penalty on CDSL for multiple compliance breaches identified during a regulatory inspection spanning the 2023-24 financial year. The depository operator has been directed to remit the fine within 45 days, with recovery proceedings to follow if payment is not received by the deadline.
In a 102-page order, Sebi detailed several violations including the depository's failure to communicate reasons for rejecting pledge requests to depository participants representing both pledgors and pledgees. The regulator also noted deficiencies in how CDSL handled Client Unpaid Securities Accounts (CUSA), with procedures falling short of prescribed standards.
Additional violations identified by Sebi encompassed inadequate safeguards against unauthorised data transmission and notable shortcomings in disaster recovery operations. The regulator emphasised that these lapses represented breaches of fundamental regulatory requirements governing depository operations in India's securities markets.
CDSL is one of two primary depositories in India responsible for maintaining dematerialised securities accounts and facilitating electronic settlement of market transactions. The penalty underscores Sebi's commitment to enforcing operational and compliance standards across market infrastructure entities.